Cone Corporation is in the process of preparing its December 31, 2024, balance sheet. There are some questions as to the pro classification of the following items: a. $66,000 in cash restricted in a savings account to pay debt. The debt matures in 2028. b. Prepaid rent of $40,000, covering the period January 1, 2025, through December 31, 2026. c. Notes payable of $232,000. The notes are payable in annual installments of $36,000 each, with the first installment paya March 1, 2025. d. Accrued interest payable of $28,000 related to the notes payable is due June 30, 2025. e. Investment in equity securities of other corporations, $112,000. Cone intends to sell one-half of the securities in 2025.
Cone Corporation is in the process of preparing its December 31, 2024, balance sheet. There are some questions as to the pro classification of the following items: a. $66,000 in cash restricted in a savings account to pay debt. The debt matures in 2028. b. Prepaid rent of $40,000, covering the period January 1, 2025, through December 31, 2026. c. Notes payable of $232,000. The notes are payable in annual installments of $36,000 each, with the first installment paya March 1, 2025. d. Accrued interest payable of $28,000 related to the notes payable is due June 30, 2025. e. Investment in equity securities of other corporations, $112,000. Cone intends to sell one-half of the securities in 2025.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Exercise 3-8 (Algo) Balance sheet; current versus long-term classification [LO3-2, 3-3]
Cone Corporation is in the process of preparing its December 31, 2024, balance sheet. There are some questions as to the proper
classification of the following items:
a. $66,000 in cash restricted in a savings account to pay debt. The debt matures in 2028.
b. Prepaid rent of $40,000, covering the period January 1, 2025, through December 31, 2026.
c. Notes payable of $232,000. The notes are payable in annual installments of $36,000 each, with the first installment payable on
March 1, 2025.
d. Accrued interest payable of $28,000 related to the notes payable is due June 30, 2025.
e. Investment in equity securities of other corporations, $112,000. Cone intends to sell one-half of the securities in 2025.
Required:
Prepare the asset and liability sections of a classified balance sheet to show how each of the above items should be reported.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa491fc3a-55ac-4b82-ab1d-885810028731%2Fc7b7a25f-def2-45db-9e09-ed7d1136ec8a%2Ftm5fiqc_processed.png&w=3840&q=75)
Transcribed Image Text:Exercise 3-8 (Algo) Balance sheet; current versus long-term classification [LO3-2, 3-3]
Cone Corporation is in the process of preparing its December 31, 2024, balance sheet. There are some questions as to the proper
classification of the following items:
a. $66,000 in cash restricted in a savings account to pay debt. The debt matures in 2028.
b. Prepaid rent of $40,000, covering the period January 1, 2025, through December 31, 2026.
c. Notes payable of $232,000. The notes are payable in annual installments of $36,000 each, with the first installment payable on
March 1, 2025.
d. Accrued interest payable of $28,000 related to the notes payable is due June 30, 2025.
e. Investment in equity securities of other corporations, $112,000. Cone intends to sell one-half of the securities in 2025.
Required:
Prepare the asset and liability sections of a classified balance sheet to show how each of the above items should be reported.
Transcribed Image Text:CONE CORPORATION
Balance Sheet (Partial)
At December 31, 2024
Assets
Current assets:
Investment in equity securities
Prepaid rent
Long-term investments:
Restricted cash
Investment in equity securities
Other assets:
Prepaid rent
Answer is not complete.
Liabilities and Shareholders' Equity
Current liabilities:
Notes payable (current maturities of long-term debt)
Interest payable
Long-term liabilities:
Notes payable (long-term)
X
$ 56,000
20,000
66,000 X
56,000
20,000
$36,000
28,000
196,000
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